Federal legislation to ban taxation of online hotel reservations could cost Texas $65 million a year

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Dick Lavine /(512) 320-0222 x 101

March 1, 2010

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For the past two years, online booking companies such as Expedia and Priceline have sought federal legislation to sharply restrict the authority of state and local governments to apply their general sales and hotel occupancy taxes to hotel rooms booked by these companies. They are now attempting to add this provision as an amendment to upcoming federal job-creation bills.

Such legislation could effectively prohibit taxation of the entire retail charge for hotel rooms that online companies book. This could permanently reduce Texas state and local revenue by some $65 million per year, at a time when the national recession is forcing reductions in public services needed by families struggling to stay afloat.

Our federal lawmakers shouldn't let online booking companies shortchange state and local governments by dodging part of their tax burden!